Delta, pilots reach a deal

Tentative accord heads off a strike

Delta Air Lines and its pilots have reached a tentative agreement on wage and benefit concessions, averting a walkout that could have grounded the carrier next week.

The Atlanta-based airline on Friday refused to release details of the deal, deferring to the pilots union. In turn, the union said details would be released in several days. The union's master executive council will meet in special session next week to consider whether to ratify the agreement.

If union leaders recommend passage, the deal will be submitted to the 5,930 Delta pilots for their consideration. It also is subject to the approval of the bankruptcy court in New York.

"We will not hurry," Lee Moak, chairman of Delta's executive council, said in a message to pilots Friday. The union will proceed "in an unrushed, methodical manner," he said.

Delta has only a small presence in Chicago, with 28 flights daily. But if pilots had gone ahead with their strike threat, the impact would have been felt in airports across the nation. Delta, the nation's third-largest airline, carried nearly 119 million passengers last year.

It has been operating under bankruptcy protection since September. An arbitration panel had been weighing the airline's request to throw out the pilots' contract. If granted, Delta planned to impose more than $300 million in annual pay and benefit cuts on its pilots.

The pilots, who agreed to $1 billion in concessions in 2004, objected that management was asking for too much. The panel will hold off on issuing a decision while the union considers the agreement.

"If ratified, the pilot contract would represent an important step forward in the company's efforts to reorganize," Philip Baggaley, a Standard & Poor's aviation analyst, said in a statement Friday.

Baggaley warned that other employees would watch closely to see how much the pilots gave up. If the terms are far from what management had demanded, it "could cause friction between the pilots and other employees and make it more difficult for Delta to attract financing to exit bankruptcy," he said.

"In addition, such an outcome would encourage other employee groups to join unions to improve their bargaining position in future contract talks," Baggaley said.

Pilots are the only major employee group at Delta represented by a union. As other financially troubled airlines have found, reaching concession agreements with pilots is viewed as a key to returning to profitability.

United Airlines' pilots union dropped its opposition to terminating its pension plan after the carrier agreed to give them a convertible note worth $550 million when the airline exited bankruptcy protection. Elk Grove Township-based United left court protection on Feb. 1.

Like Delta, Northwest Airlines filed for bankruptcy in September. Pilots at Eagan, Minn.-based Northwest are considering a $358 million concession package. In exchange, the agreement gives pilots $888 million in stock in a reorganized Northwest when the company emerges from bankruptcy.

But the power of pilot unions has been whittled away, with pilots giving up so much that recent agreements are "hard to call a victory," said George Hopkins, an airline labor historian who recently retired from Western Illinois University in Macomb.

"The industry has changed, mostly to the detriment of labor," he said.

Pilots at some of Delta's competitors have lost their pensions, seen wages and benefits reduced and found work rules changed so much that they are home just a few days each month, Hopkins said.

Delta has achieved temporary labor peace with its pilots, but a subsidiary is in a pitched battle with its flight attendants union.

A bankruptcy judge is considering whether to void the attendants' contract with Comair, a regional airline based in Erlanger, Ky., near Cincinnati.